Professor Dang Hung Vo: Land price must be over 500 million VND/m2 at the highest point.

The Ministry of Natural Resources and Environment has just announced a draft Decree on the 2015 land price framework applicable to agricultural and non-agricultural land groups. If based on this draft, the "golden" land located in the two big cities of Hanoi and Ho Chi Minh City could double. However, according to experts, this price is only closer to the actual price.

Land prices will increase 2.4 times in 2015

According to the draft, the current highest land price applicable to special urban areas in the Red River Delta and the Southeast is expected to reach VND162 million/m2. Meanwhile, the current land price ceiling in Hanoi and Ho Chi Minh City still exceeds the Government's land price framework by 20%, at VND81 million/m2. The points with the highest prices are currently located on Hang Ngang and Hang Dao streets in Hanoi and Nguyen Hue, Dong Khoi and Le Loi streets in Ho Chi Minh City.

The ceiling price of land in Hanoi and Ho Chi Minh City is still at 81 million VND/m2. Illustrative photo

Land in urban areas has the lowest price of 40,000 VND/m2 applied to the minimum price of urban type 5 in the North Central region. The minimum price of urban type 4 in the North Central region, commercial and service land in urban areas has a ceiling price of 129.6 million VND/m2. The lowest price range belongs to mountainous communes in the Central Highlands with the price of 15,000 VND/m2. The highest price belongs to communes in the Red River Delta with the maximum price of 29 million VND/m2.

Also according to the draft, in cases where the province or city has land in remote areas with difficult economic conditions and the common land price on the market is lower than the minimum price of the land price frame of the same type, the People's Committee of the province or city is allowed to set this land price lower than 20% of the minimum price of the same type of land.

Thus, if the new framework is approved, the price of “golden” land in Hanoi can be valued at more than 162 million VND/m2. Commercial and service land in urban areas will fluctuate between 32 million VND and 192.6 million VND/m2.

Consider the minimum price

Basically, experts all agree with the proposal to increase land prices of the Ministry of Natural Resources and Environment. According to Professor Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, this is a good step because previously, the land price frame was only 60 million VND/m2, the highest in Hanoi and Ho Chi Minh City was only raised to 86 million VND/m2 because localities could raise the price above the ceiling price by about 20%.

Professor Dang Hung Vo said that if the land price frame is still kept at only 60 million VND/m2, it will lead to a tragedy. For example, with a project in Hang Bai (Hanoi), people demand 700 million VND/m2 while the price frame of Hanoi is only 86 million VND/m2 and the price frame of the government is only 61 million VND/m2.

“The Ministry of Natural Resources and Environment is setting the price range at 165 million/m2, but in localities it will only be raised to 200 million at most. If the price is 200 million while the actual price is 500 million, the state will surely be the one who suffers, because the state's revenue is lost. Taxes are collected according to this price list. This is a step closer to the actual price, land prices must be higher, around 500 million in places with the highest prices. But this is an asymptotic step so that in a few years it will increase even higher, a step closer to avoid price shock,” commented Professor Vo.

From the perspective of a price appraisal expert, Mr. Nguyen Ngoc Tuan, former Deputy Minister of Finance, said that the minimum price and the maximum price of the price range must comply with the "common price" on the market to serve as a basis for the People's Committees of the provinces to build specific price lists to serve the implementation of 6 purposes of handling financial relations. It should be clarified: Land lease policy, how much should be collected on the price; land allocation with land use fee collection, how much should be collected to encourage investment...

In addition, the Ministry of Natural Resources and Environment needs to consider the minimum price of the price frame: If the common price is taken as the minimum price of the price frame while in many places the price is lower than the minimum price, the consequence will be: The price level in that place will increase incorrectly. This will lead to incorrect handling of financial policies: People with land use rights will wonder because they have to fulfill high financial obligations, when the State reclaims land, they will have to pay incorrectly... Therefore, there needs to be a mechanism to handle this problem.

According to VOV